Greek Referendum Poll

[Richard Hakluyt]

".......a bit of an illusion of a permanent boom in the 90s and 2000s.........." superb understatement there celery old chap  , do you have Englishmen in your ancestry  ?

[Martinus]

It's really hard to make counter-cyclical policy during a recession, and meet all the safety need repayments, when your budget is taken over by debt repayment.

It's not just hard, it's impossible when you cannot print money, set interest rates or tariffs, and your creditors have tools to keep your inflation as close to zero as possible. 

[Martinus]

".......a bit of an illusion of a permanent boom in the 90s and 2000s.........." superb understatement there celery old chap  , do you have Englishmen in your ancestry  ?

I have always considered Celed a "Spanish Sheilbh".

[celedhring]

Why? 

[MadImmortalMan]

It's really hard to make counter-cyclical policy during a recession, and meet all the safety need repayments, when your budget is taken over by debt repayment.

Difficult to handle any kind of event under those conditions. Best not to let it get that far from a risk-management perspective.

[Martinus]

Why? 

Dunno. I think it dates back to us playing EU RPG back on the Paradox forum - I think I had both of you confused initially, as you had similar writing style. 

[Valmy]

With that amount of money being lost it seems deeply irresponsible to cut funding to the IRS.

Starve the beast!

[Razgovory]

Neat.  The amount of lost revenue from tax evasion in the US for one year could pay off the entire Greek debt!  We could go a long way into reducing deficit spending if we just pumped up the IRS some more.  With that amount of money being lost it seems deeply irresponsible to cut funding to the IRS.

But the law of diminishing return will kick in at some point.  You can hire millions of IRS agents, but at some point, the marginal taxes collected will be less than the salaries and overhead of the additional agents.

Yeah, at some point.  But with well over 400 billion uncollected and a budget of less then 13 billion I think we have a long way to go.

http://www.usatoday.com/story/money/2015/06/17/irs-budget-cuts-hurt-services/28869343/

Budget cuts are taking a taxpayer-unfriendly toll on the federal agency Americans love to hate, a new report says.

Lower IRS budget funding and collection resources have led to declines in taxpayer service, tax case closures and collections of overdue federal taxes, according to a report Wednesday by the Treasury Inspector General for Tax Administration.

The IRS' annual budget was cut by more than $1.2 billion between federal fiscal years 2010 and 2015, the report said.

During that period, budget reductions and reassignments resulted in a 21% reduction of Automated Collection Service representatives, and a 28% decline in Field Collection revenue officers, staffers who pursue non-payment cases, the report said.

Since 2011, the personnel reductions resulted in a 25% drop in taxpayer phone calls answered by remaining IRS Automated Collection Service workers, the report said.

Taxpayers who managed to get their calls answered spent an average of 15.9 minutes waiting for a contact representative in 2014, up from 8.1 minutes in 2011, the report found.

IRS Field Collection personnel collected $3.02 billion in fiscal year 2014 revenue, a $222 million or 7% drop from the $3.244 billion collected in fiscal year 2011, the report said.

Additionally, revenue officers are closing fewer tax cases. In fiscal year 2011 they closed an average of 125 cases. The average closure total dropped to 110 cases in fiscal year 2014, the report said.

J. Russell George, head of the inspector general's office that oversees the IRS, drew a correlation between cuts in the collection budget and reductions in efficiency and effectiveness of the tax agency's collection efforts.

"The availability of key collection employees directly affects taxpayer service and the IRS' ability to take appropriate enforcement action on delinquent taxpayers," George said in a statement issued with the report findings. "Taxpayers may become frustrated and remain non-compliant if they are unable to reach a contact representative to resolve their tax issues."

The IRS said it streamlined leadership accountability of its collection program in fiscal year 2015, making the program more efficient.

"We will continue to look for ways to maintain taxpayer service and fulfill our mission of collecting unpaid taxes," Karen Schiller, head of the IRS' Small Business/Self-Employed Division, wrote in response to the findings. "But, as you acknowledge in your report, this will be increasingly difficult if staffing continues to decrease."

Congressional Republicans control both the U.S. House and Senate and have been leery of approving budget hikes for the IRS, an agency that has drawn criticism for allegedly singling out conservative political groups for greater scrutiny when the organizations applied for tax-exempt status.

President Obama proposed $12.9 billion in IRS funding for fiscal year 2016, a nearly $2 billion increase from this year's budget. House Republicans, however, answered with a proposed $838 million overall budget cut that they say would enable the IRS to perform its core responsibilities.

[Tamas]

Milton Friedman apparently saw all the trouble coming in 1997:
http://www.afr.com/opinion/greece-debt-crisis-milton-friedmans-1997-prediction-of-the-eurozone-disaster-20150707-gi5tgk

The drive for the Euro has been motivated by politics not economics. The aim has been to link Germany and France so closely as to make a future European war impossible, and to set the stage for a federal United States of Europe. I believe that adoption of the Euro would have the opposite effect. It would exacerbate political tensions by converting divergent shocks that could have been readily accommodated by exchange rate changes into divisive political issues. Political unity can pave the way for monetary unity. Monetary unity imposed under unfavorable conditions will prove a barrier to the achievement of political unity.

[Zanza]

Edit: Sorry, now I can see my post was misleading. I didn't mean to say Germany created a real estate bubble in Greece. I meant the effect was similar to a real estate bubble, only that it all went into consumption. Essentially, Germans were lending to Greeks inordinate amounts of cash to buy more German products.

French were by far the biggest lenders, but your point still stands.

[Gups]

Loads of people were saying the same as Friedman. It wasn't exactly much of an insight since the project was always avowedly political. The Germans only agreed to support it as quid pro quo for France withdrawing its objection to reunification. 

It's funny watching this play out in the British media where Greece is being used as a stick to bash the EU by the Europhobics on the right and the anti-capitalists on the left. At the same time I've been reading a history of the Britain between 1974 and 1979 including the referendum on EEC membership where exactly the same uncomfortable alliance was formed by the extremes. 

[Zanza]

Interesting data. I suppose Greece should have reduced its debt ratio in the period 1992-2007, but the data is consistent with them being victims of the 2008 meltdown rather than being chronic wastrels 

The last few years of GDP growth (maybe about 2001-2007 when they were in the Euro) were fueled by a never-before-seen availability of cheap credit. That growth was built on sand, not sustainable. Greece could have done much better and build a slower, but more sustainable economic growth. So even if the debt/GDP ratio remained flat, that was only the case due to the dividend of that quotation growing "too fast".

[Zanza]

It's really hard to make counter-cyclical policy during a recession, and meet all the safety need repayments, when your budget is taken over by debt repayment.

It's not just hard, it's impossible when you cannot print money, set interest rates or tariffs, and your creditors have tools to keep your inflation as close to zero as possible. 

You can easily do fiscal measures in boom times. All the stuff you name here are monetary or custom matters. 

[Zanza]

Loads of people were saying the same as Friedman. It wasn't exactly much of an insight since the project was always avowedly political. The Germans only agreed to support it as quid pro quo for France withdrawing its objection to reunification. 

This. It's the only reason why Greece was admitted.

[Zanza]

The Greeks went to the especially called EU summit in Brussels WITHOUT a new proposal.   

They are just epic trolls.

Do they think time is on their side?